Yaya Blossom’s Inc. has a March 31, 2014 fiscal year end and a 35% income tax rate. The following information is available for its 2014 year end:

1.    Performed $880,000 service revenue and paid $325,000 in salaries. Interest expense was $12,600.

2.    Paid dividends in December 2013 of $14,000 that had been declared in November 2013.

3.    On March 10, 2014 declared dividends of $19,000 payable April 30, 2014.

4.    Recorded and remitted taxes of $140,000 (related to 2014 fiscal year) during the year.

5.    Issued common shares for $15,000 on January 31, 2014.

6.    Retained earnings balance on April 1, 2013 is $67,000.

Instructions

a.    Prepare an income statement and record the adjustment to income tax.

b.    Prepare a statement of retained earnings.

Answer rating: 100% (QA)

Income statement and record the adjustment to income t... View the full answer